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Netflix Warns Regulator Not to Tax Canadian Streaming Service

The "Orange Is the New Black" streamer told the CRTC that Canadian content is already doing well online, making new regulatory obligations unnecessary.

TORONTO – Netflix has told Canada's TV watchdog not to tax the U.S. video streaming giant as it does business here, despite industry calls for Netflix Canada to subsidize local content production.

"The imposition of a 'Netflix tax' or 'OTT Tax' may make it more difficult for Netflix to offer access to this content at the same affordable rate," Corie Wright, director of global public policy at Netflix, told the CRTC in an 11-page submission filed on June 27, 2014.

Wright told the TV regulator, which is holding upcoming public hearings on the future of Canadian broadcasting, that Netflix already licenses Canadian programming for its Netflix Canada service, which launched here in 2010.

So slapping a tax on Netflix Canada "might translate into an increase in price without … a commensurate benefit for Canadian content, its producers, or Canadian consumers," the Netflix submission argued.

The CRTC in the past has ruled it will not regulate Netflix Canada or force the U.S. video streaming giant and other foreign digital platforms to subsidize homegrown Canadian TV series.

But that hasn't stopped calls from local players for Netflix Canada, iTunes Canada and other so-called “over-the-top” (OTT) U.S. digital platforms to be compelled to subsidize indigenous TV production.

Netflix's Wright told the CRTC that "Canadian content is thriving online," making new regulatory obligations for Netflix Canada unnecessary.